UN Migration Agency Launches Study to Help Scale up Formal Remittances to Ethiopia

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UN Migration Agency Launches Study to Help Scale up Formal Remittances to Ethiopia

Posted:

08/29/17

Themes:

Migration Research, Migration and Development

Addis Ababa – IOM, the UN Migration Agency, last week (24/08) launched Scaling up Formal Remittances to Ethiopia, a research study that explores increasing the volume and value of formal remittances to Ethiopia.

“An estimated USD 465 billion in remittances is expected to flow into developing countries in 2017 alone,” said Maureen Achieng, IOM Ethiopia Chief of Mission, at the launch of the report.

“Remittances contribute to more than 5 per cent of Ethiopia’s GDP and have increased from USD 141 million in 2003 to USD 4 billion in 2015/16 fiscal year,” said Demeke Atnafu, Director General for Diaspora Engagement Affairs Directorate General at the Ethiopian Ministry of Foreign Affairs, also at the launch.

Despite the steady increase in remittances to Ethiopia, Atnafu acknowledged that a significant amount of remittances is sent through informal channels. According to the study, as much as 78 per cent of the money sent may be going through informal channels in some corridors.

Leon Isaacs, international remittance expert, consultant and author of the report, noted that the problem with informal flows is that, “they pose a risk to the consumer, reduce opportunities to encourage targeted investment, lead to a loss of foreign exchange for the Government, and undermine Anti-Money Laundering (AML) as well as Combatting the Financing of Terrorism (CFT) efforts.”

The launch provided an opportunity for stakeholders – banks, money transfer companies, NGOs, diaspora associations, Government officials and policymakers – to discuss the study’s recommendations to scale up formal remittances to Ethiopia. Key recommendations discussed at the launch include the need to:

introduce a multi-stakeholder working group focused on remittances and diaspora investment

Scaling up Formal Remittances to Ethiopia was produced under the ACP-EU Migration Action, an initiative of the African Caribbean Pacific States (ACP) Secretariat, funded by the European Union and implemented by IOM.